New Solutions to Old Problems-Senate Republican Caucus Unveils Package for the Twenty-Second Legislature

Hawaii State Republican Senators unveiled their Senate caucus package earlier this week, in preparation for the opening of the Twenty Second Legislature, which begins today and runs through May. House Republicans and Senate Republicans are aligned on many of the proposals, which includes tax breaks on food for the poor, medical services, Medicare and Medicaid, decentralizing the educational system and tougher penalties for corrupt politicians. Freshman Representative Lynn Finnegan says she and the Republican Caucus will be pushing this legislative session for a food tax credit for the poor. The Democrat controlled legislature and Governor Benjamin Cayetano repealed this tax credit in 1998. Republicans also will be pushing to remove the General Excise Tax from medical services, Medicare and Medicaid. Finnegan and other republicans say Hawaii is the only state in the nation that taxes medical care, Medicare and Medicaid benefits for the elderly, and is one of the few states that taxes food. Here are their specific proposals outlined in a Monday press conference. ‘TAX RELIEF MEASURES’ ‘1. GET TAX EXEMPTION ON GROCERIES AND MEDICAL SERVICES’ *Only applies to unprepared groceries. *Does not apply to food purchased in restaurants. *Applies to meals prepared for home distribution for disabled or handicapped persons 60 years or older who are physically or mentally unable to adequately prepare their own food. *Cost savings estimate is $182 back in the taxpayers’ pockets: $82 million from medical services, and $100 million in food. ‘2. GET EXEMPTION FOR EMPLOYEE LEASING’ *Provides a GET exemption for amount representing employee wages and benefits paid to an employee leasing company. *Eliminates the duplicative taxing of employee benefits paid by employee leasing companies. *Fiscal impact is approximately $345,000. ‘3. ZERO-BASED BUDGETING’ *To provide accurate, truthful budgeting for the state of Hawaii. ‘4. GET REDUCTION’ *Annually reduces the GET by a 0.5 percent across the board. *Fiscal impact of this measure would be $200 million back in the taxpayers’ pockets. ‘5. ELIMINATION OF MOST SPECIAL FUNDS’ *Eliminates most special funds and returns the money to the general funds. *Does not include federally-mandated special funds and the Hawaii Hurricane Relief Fund. *Estimated amount transferred to general fund is $3 billion dollars. ‘EDUCATION MEASURES’ ‘1. DECENTRALIZATION OF THE PUBLIC SCHOOL SYSTEM’ *Restructures the DOE and BOE into elected and autonomous school boards with seven members. *The seven members are: five elected members, two appointed by the governor one of whom will have administrative experience and the other shall have fiscal experience. *This bill includes a state Constitutional amendment. ‘2. CHARTER SCHOOLS’ *Doubles the number of authorized new century charter schools. *Requires the DOE and BOE to keep charter school budget requests and regular public school budget requests separate when reporting to the legislature and auditor. *Requires a budget report from the auditor’s office within 30 days of the release of the second round of charter school funds. *Authorizes equal benefits: tenure, probationary status, DOE seniority, accrued retirement for all conversion charter schools. ‘3. TEACHER RECRUITMENT AND RETENTION’ *Creates a partnership with U.H. and other Hawaii universities. *Provides tuition assistance for teaching and/or administrative degrees. *Provides teacher scholarships/waivers, vouchers for teachers. ‘ECONOMIC DEVELOPMENT’ ‘1. MARITIME INDUSTRY DEVELOPMENT’ *Allows private contractors to develop new harbor resources without infringing on interest of existing lessees. ‘2. SMALL AIRPORTS’ *Allows the state to sell or lease small airports. ‘3. DEREGULATION OF GROUND AND MARITIME TRANSPORTATION’ *Eliminates regulation by the Public Utilities Commission of ground and maritime industries. ‘4. LAND USE COMMISSION’ *Eliminates the Land Use Commission. *Includes proviso for civil servants to retain their jobs. *Transfers state Land Use Commission records to county land use commissions. ‘5. WATER USE COMMISSION’ *Eliminates the Commission on Resource Management (Water Commission) *Transfers authority to the various county water commissions. *This bill includes a Constitutional amendment. *Transfers Water Use Commission records to the county water use commissions. *Includes proviso for civil servants to retain their jobs. ‘6. DEREGULATION OF THE ELECTRIC AND GAS INDUSTRIES’ *Removes the electric and gas companies from Public Utility Commission oversight. *Promotes energy diversity. *Creates a new Commission to be known as the Energy Commission. *Establishes enterprise zones. ‘7. PROFESSION LICENSING RECIPROCITY’ *Institutes reciprocity for certain categories of regulated professions. *License holders in other states can obtain a Hawaii license without additional schooling, exams, or other requirements. ‘OTHER MEASURES’ ‘1. TORT LIABILITY REFORM; JOINT AND SEVERAL LIABILITY/PUNITIVE DAMAGES’ *Extends government’s immunity from joint and several liability to all defendants. *Caps punitive damages at $375,000. ‘2. LAWSUIT ABUSE’ *Eliminates uninsured and chemically impaired motorists’ right to sue for non-economic damages. ‘3. MEDICAL MALPRACTICE REFORM’ *Provides additional protections for medical professionals, based on California model. ‘4. TRAFFIC FINES’ *Legislates that 50 percent of non-adjudicated traffic fines go to county general funds.

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